Petroleum requirements since V-J day have been appreciably higher thanpredicted. Foreign operations now exceed maximum wartime levels by about 14 percent. Domestic operations since V-J day have averaged 92 per cent of thewartime peak. In spite of maximum foreign refinery runs, large exports of allproducts, except residual fuel oil, are necessary to meet foreign demand.
During the next few years it is expected that foreign operations willcontinue at capacity, including new installations, but that, because ofincreases in foreign demand, exports will continue at about their presentlevel. Domestic operations will increase during this period and crudeproduction probably will exceed maximum efficient rates.
Even after 10 years some exports probably will be required, but eventuallythese will be supplanted by increased output of foreign refineries, except forsmall tributary exports. The increase in domestic requirements will exceed thedecline in exports. Unless findings of crude oil exceed present expectations,the increasing demand will be met by increased imports and syntheticmethods-such as the Hydrocarbon Synthesis Process for conversion of natural gasand coal to gasoline and distillates. Catalytic cracking installations willincrease as crude availability decreases. This will help to meet the increasingdemand for gasoline but will intensify the domestic shortage of residual fueloil. Eventually larger imports will be required to satisfy the demand - forthis product.
Under the pressure of the wartime period, there was time only occasionallyto look ahead in anticipation of what the postwar era held for the petroleumindustry. Perhaps the general expectation was that a rather pronounced declinein the level of industry petroleum operations would take place shortly afterthe end of the war, with the impact felt mainly on the economy of the UnitedStates. It is of interest now, nine months after V-J day, to take inventory ofthe near-term situation and see what significant forces are at work. With thisas a starting point, it should be possible to engage in something moresatisfactory than pure speculation concerning trends in the immediate futureand 10 to 20 years ahead.
With petroleum consumption declining temporarily after V-J day, the oilindustry is urged to use this period as a kind of stopgap to rebuild itswar-depleted inventories and help cushion the effect of this decline onproducers and refiners. Higher inventories should be reestablished, sincerecent experiences have indicated that, by and large, the present inventoriesof crude oil are too low even with the tremendous current production available.The following analysis indicates that inventory levels could be built up toabout 490,000,000 bbl. by the end of 1947, an increase of about 40,000,000 bbl.over the reported stock estimated far the war's end. If at the end of the warthe military have some 20,000,000 bbl. on hand, this inventory will either beresold to the industry or certain demands that have been assumed to be met byindustry will be supplied out of these military stocks, which would leave about20,000,000 bbl. (net) to be built up from current production. For stockrebuilding the industry could use 10,000,000 bbl. of crude plus 10,000,000 bbl.of products, totaling 20,000,000 bbl. If this were spread over a year, thiswould mean 55,000 bbl. a day. By analyzing the average inventories held in ayear with the total quantity of goods handled during the year, the followingstudy and tables indicate how far the inventories should increase in theimmediate postwar period.
For the period immediately following V-J day, most of the petroleumeconomists have forecast a considerable decline in the total consumption ofpetroleum and its products in the United States. This will be caused by theelimination of most of the military demands and the inability of civilians toimmediately replace automobiles, burners, etc., and thus increase theirrequirements to make up for the military decline. When the automobile industryhas been back on full production for two or three years, civilians will be ableto consume much larger quantities of gasoline. Delay in the manufacture of newoil burners and the time it takes to construct new homes, adds up to the samestory for distillate fuels. In reviewing this outlook, the question has arisenwhether the petroleum industry should not use this period of lower consumptionas a kind of stopgap to rebuild its war-depleted inventories and help cushionthe effect on producers and refiners of this sudden drop in requirements. Somepersons have indicated that hundreds of thousands of barrels a day could beused for this purpose extending over a year or more. Refineries will be inexistence, which could run over 5,000,000 bbl. of crude oil a day and crude-oilproduction might be running 600,000 to 700,000 bbl. a day above the demands nowforecast for the period after V-J day.
The specific purposes of formal engineering education include training inthe basic sciences, the engineering-problem method, the rudimentary developmentof technical skills, an appreciation of values and costs, and an understandingof the art of engineering as distinguished from its science. Two majordivisions of an educational program in engineering are recognized: (1) thescientific technological, and (2) the humanistic-social. Hence, the entirecurriculum for the four-year program in specialized petroleum engineeringschools must be designed to give the student an initial impetus in thedirections indicated. In accordance with suggestions from the EngineeringCouncil for Professional Development, more attention is being given to thefundamental approach in the undergraduate curriculum.
This paper presents a cross-sectional viewpoint of the various educators in thepetroleum engineering schools concerning course contents in the specializedcurricula. An outline is suggested for the content of the specialized courseswherein the engineering problem method or quantitative approach is emphasized.Although the particular viewpoints of the author have been stressed, yet dueacknowledgment is made to a considerable number of petroleum engineeringeducators and engineers in industry interested in educational work, for theircontribution of course outlines or helpful suggestions with respect to programsthat will be of maximum value to students, institutions, and the industry theyserve.
Although ?standardization? of course material is not suggested, the advantageto be gained by cooperative determination of purpose and scope are apparent,particularly from the standpoint of the proper accreditment of petroleumengineering schools by petroleum engineering educators who have laid a basisfrom which to measure educational values. Petroleum engineering has ?come ofage? and deserves the same careful attention with respect to curricula that hasbeen accorded other engineering branches.
The method of R.W. Moore for determining subsurface interfacial depths bymeans of integrated curves of apparent resistivity has been analyzedtheoretically. It is found that the only unique tangents that can be drawn tosuch curves are the asymptotes at infinite electrode spacing and the tangentsthrough the origin at vanishing electrode spacing. Explicit expressions havebeen derived for the relationship between the electrode spacing at the pointsof intersection of these tangents and the thickness of the surface strata as afunction of the conductivity parameters for the two-layer and three-layerearths. It is found that in all cases the electrode spacing at the points ofintersection will exceed 3/2 of the thickness of the surface layer, and mayeven become indefinitely large as the resistivity of the deepest layersincreases as compared with that of the surface layer. These results do notagree with the empirical findings of Moore that the intersection of the tangentlines fall at an electrode spacing very approximately equal to the thickness ofthe surface layer.
In a recent paper, R.W. Moore proposed a new method for the analysis andinterpretation of earth-resistivity measurements. This consists essentially inplotting against the electrode separation of a Gish-Rooney system the integralof the apparent resistivity with respect to the electrode spacing, andobserving the breaks in the integral curves. Specifically, tangents are drawnto the various segments of the integral curves, which show appreciablydifferent slopes, and the intersections of these tangents are used asindications of the depths of the various underlying strata. By numerousexamples Moore has shown that the electrode separation at the firstintersection so found agrees very closely with the depth of the bottom of thesurface layer. Moreover, in a number of instances the intersections for greaterelectrode spacings seemed to correspond to the depths of deeper beds.
Of the four papers that comprise this TECHNICAL PUBLICATION, three are casehistories of individual geophysical prospects, subsequently tested bydrilling.
The bibliography of Dr. Barton's published scientific papers includesinvestigations in physiography and surface geological mapping, as well as hisgeophysical papers, and from this list it is to be observed that he earlyrecognized the place of different types of geophysical prospecting methods inthe search for geological structures of economic importance. Moreover, hisviewpoint was not merely that the structures should be found, but that thegeophysical data should be examined quantitatively to determine the geometry ofthe structures. In other words, that although these data are insufficient todeduce a unique form for the structure that caused the effects measured in thedata, the engineering computations should be carried out to give as much of adefinite configuration to the structure as the data permitted, in order thatthe testing of the structures could be conducted in the most economical mannerand with the idea that the experience so gained could be later incorporated inthe study of structures subsequently found.
Dr. Barton continually emphasized the quantitative use of geophysicalobservations, whereas at the time that he began his specialization ingeophysics it was considered sufficient to use observations only qualitatively.He, more than anyone else, was responsible for the first volume on geophysicalprospecting issued by the Institute in 1929, and his three articles in thatvolume stressed the quantitative use of geophysical prospecting.
The fourth article in this present TECHNICAL PUBLICATION is a furthercontribution to this branch of geophysical interpretation, and is a supplementto the paper in the 1929 volume, "Calculations in the Interpretation ofObservations with the Eotvos Torsion Balance."
The two War Emergency Pipe Lines were built by the United States Governmentto meet the serious transportation shortage caused by the diversion of thetanker fleet from the Gulf to East Coast run. The estimated 140-million dollarcost of these pipe lines approximates that of two battleships; however, becausethe lines have been so widely publicized as national defense measures, andfurther because their utility is so closely linked with the daily convenienceand welfare of the civilian population, their importance in the public mind isprobably magnified beyond that of two ships of the line. Thus, there may bestrong demand by the public, Congress, and the executive branch of theGovernment to maintain these lines in operating condition after the war.
Probably the simplest means of maintaining them in good condition is tocontinue them in operation. In keeping with American principles of privateenterprise, it will be desirable if they can be shown to have a place in theeconomic life of the country and can be operated by industry.
The most obvious use for the lines would be the movement of crude andproducts from Texas to the East Coast; for this business they will have tocompete with tankers. Their location enables them also to handle movements intoDistrict 2, for which business they must compete with existing privately ownedpipe lines and with barges. This paper attempts to analyze economic factorsthat bear on the use of these two big lines in the postwar period and todevelop through estimates the competition they may offer to other forms oftransportation.
The writer has purposely refrained from making recommendations as to theutilization of the War Emergency lines for petroleum transportation because itseems likely that prospective purchasers would be one or more operating oilcompanies, each of which would analyze the utilization of the lines in light ofits own business requirements. It is doubtful whether the lines would beacquired by a non-petroleum financial group for operation as commercialcarriers because interstate common carriers are prohibited from contracting tofurnish services to shippers, a restriction that implies that carriers, inturn, cannot expect to obtain guarantees of traffic from independent shippersin great enough volume to ensure return of their investments.
The forecasts presented in this paper constitute an attempt by the writer topredict the pattern of the consumption of petroleum products in the UnitedStates during the period of transition from war to peace. Although, inpreparing the estimates, secular trends were not overlooked, greater emphasiswas placed upon considerations of a cyclical character, or upon influenceswhich might be peculiar to parts of the period. The estimates do not extendbeyond the year 1950 because by then conditions in the industry should havereturned to normal.
The consumption of petroleum products is affected, of course, by changes in thecondition of business in general. Before estimates of petroleum consumptioncould be prepared, therefore, it was necessary to predict the pattern ofgeneral business during the period under review, particularly the economicseries that in the past have shown the closest relationships with petroleumconsumption.
It is the writer's view that business activity in this country (as measured byindustrial production) will be higher on the average during the period betweenthe end of the war and the year 1950 than it ever was before during a peacetimeperiod of the same duration. When the war is over, consumers will have savedamounts of money that will be very large as compared with any previousaccumulations. There is little question, therefore, as to the financial abilityof consumers to purchase goods. The production of many durable consumers'goods, such as automobiles, refrigerators and radios, has been completelystopped since early in the war; also, many semidurable and nondurableconsumers' goods have not been available in the quantities or the qualitiesdesired. There is considerable need, therefore, for consumers to purchase goodsafter the war. The important question is whether consumers will purchase goodsin large enough quantities to keep our economy running at a high level. Thewriter answers this question in the affirmative. The mere existence of verylarge consumer savings lends considerable support to this view because, withsuch backlogs of "security," consumers can afford to spend more oftheir current earnings than they otherwise could. Also, several polls have beentaken, which indicate that consumers expect to buy large quantities of avariety of goods. Some of the savings, therefore, probably will go into currentconsumption. Even though this percentage is relatively small, so that the bulkof the funds accumulated by consumers during the war continues to remain assavings during the period under review, spending should be great enough tostart the production cycle and keep it going at a relatively high rate for afairly extensive period.
In order to supply the immense quantities of 100-octane aviation gasolinerequired by the military program and to furnish stocks for the manufacture ofsynthetic rubber, the oil industry installed catalytic cracking on a largescale during the war, because none of the existing processes were adapted tothe manufacture of these products in the quantities required, from a limitedamount of crude.
While it had been recognized for some time that this process wouldeventually be widely used in the oil industry, under ordinary conditions theinstallation would have been spread over a number of years through thereplacement of old equipment and as enlargements were required.
However, under the urgency of the war demand, its adoption was imperativeand the industry was forced to make a major change in its equipment before ithad had a chance to become familiar with the effect of the process whenoperating for the usual peacetime products. Because of the peculiar features ofcatalytic cracking, there was considerable speculation among refiners and usersof petroleum products regarding the results it would have on the postwar supplyof motor gasoline, household heating oil and diesel and residual fuel. Thestudy reported in the following paper was made to determine the direction ofthe changes and to evaluate their possible extent.
Status of Catalytic Cracking
Prior to our entering the war, only one of the three catalytic crackingprocesses with which the industry is now familiar was in commercial operation,and the installations of this one were confined very largely to the twocompanies that were instrumental in its development. In fact, if it had notbeen for the war, it seems likely that the adoption of catalytic cracking forthe manufacture of motor fuel would have been gradual, because very markedeconomies are needed to justify scrapping any process of which the design isfairly modern and the equipment in good condition.
However, when it became evident that large quantities of aviation gasolineof 100 octane and above would be required, the economics with respect tomanufacture of motor fuel were disregarded and catalytic units were installedon a large scale, because, by a happy coincidence, they provided, in quantity,both a base gasoline for blending with high-octane components and gasessuitable for charging stocks to alkylation and other processes for theproduction of these components. These gases also provided material for theproduction of synthetic rubber, giving further impetus to the building of thistype of equipment.
The 24-in. crude-oil line and the 20-in. petroleum-products line, built as awar emergency by the United States Government and running from points in Texasto the New York-New Jersey-Philadelphia area, were constructed only because ofthe inability during the war to continue normal ocean tanker movements from theGulf Coast to the East Coast. The postwar disposition of these lines may beconsidered as one of the important problems of the postwar readjustments in theoil industry, if not the most important one. In the first place there appear tobe many complications in keeping the lines in crude-oil or petroleum-productsservice. This conclusion was reached also in a study by T. E. Swigart,President of Shell Pipeline Corporation.
Since the lines are too large for anyone company to utilize, and since itappears likely that a surplus rather than a deficiency of tankers will existafter the war, most companies probably will feel that they can achieve lowercosts and more satisfactory results from the resumption of tanker movements tothe East Coast rather than by endeavoring to take over or utilize the capacityin the large pipe lines under some tariff-rate structure.
As for using the lines for making deliveries to the middle west or centraleastern areas, it would appear that when the war is over and normaltransportation arrangements can be resumed, there will be no need of any extracapacity for such deliveries. Therefore, the War Emergency lines could beutilized for this purpose only if privately owned pipe lines and othertransportation facilities were to be displaced.
Against this rather unprepossessing prospect for use in petroleum or productservice is the fact that at or near the source of the lines lie the greatestdeveloped gas reserves in the world, for much of which there is at present nosatisfactory market outlet; and at the other end of the lines lies one of thegreatest concentrations of population in the world, which is not now served bynatural gas. Those who have been fortunate enough to use natural gas can havelittle doubt of its desirability as a domestic fuel. An analysis of the marketpotentialities and comparison with other areas where natural gas is beingdistributed, and where it has displaced manufactured gas, makes it seem clearbeyond question that the full capacity of both of the large-diameter linescould be fully utilized in this service, and this without creating any unduedrain upon the gas reserves of the nation.
A graphical method of analyzing the data obtained from shallowearth-resistivity depth tests is presented. The method is based upon empiricalresults and has no theoretical basis. The usual apparent resistivity-electrodespacing curve is used together with a cumulative resistivity-electrode spacingcurve plotted on the same sheet. The greatly reduced scale required forplotting the cumulative values of resistivity together with the effect of thesummation of the individual resistivity values serves to minimize the effect ofpurely local surface anomalies and inadvertent errors of measurement. The pointof intersection of tangents or straight lines drawn to intersect at zones ofmaximum curvature in the cumulative curve indicates the depth to the underlyingmaterial. Numerous figures are presented in which data from published reportsand from recent field studies are analyzed and the results compared with actualdepths established by borings or with depth values obtained by the use oftheoretical methods of analysis. Smoothly rounded curves of apparentresistivity such as are often obtained in the field, and which have been aserious drawback to attempts to analyze the data empirically heretofore, appearto be susceptible to rather accurate analysis by the method described.
The method is best suited to analyses involving shallow two-layerformations. It has been applied successfully, however, in analyzing the dataobtained from tests made over shallow three-layer formations. As with mostempirical methods, its chief advantage is its simplicity and ease ofapplication.
There have been published many papers that discuss the interpretation ofdata obtained from earth-resistivity tests when using the four-terminal methodof electrode spacing developed by Wenner. The majority of these have dealt withtheoretical analyses for two-layer and three-layer formations. Some sets of"master curves" have been presented for use in analyzing field data todetermine the depth to the first and possibly the second horizon below theearth's surface. Although practically all of these theoretical methods ofanalysis have appeared to have particular merit and some have been usedsuccessfully in practice, they have been found to be of little value where thelocal conditions surrounding the test failed to conform to those assumed in thetheory.
In certain fields, particularly in civil engineering, relatively shallowexplorations are often involved and geophysical methods of test must competewith the direct methods of exploration ordinarily used. Only when it can bedemonstrated that geophysical methods of test can materially reduce the timeand cost of a given exploration project will the civil engineer abandon directmethods in favor of the interpretations of geophysical exploration data.